FINANCIAL STATEMENTS INDEPENDENT AUDITORS REPORT. Rebuilding Together OKC, Inc.

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1 FINANCIAL STATEMENTS INDEPENDENT AUDITORS REPORT Rebuilding Together OKC, Inc.

2 TABLE OF CONTENTS Page Independent Auditors Report... 1 Financial Statements Statements of Financial Position... 2 Statements of Activities... 3 Statements of Cash Flows... 4 Statements of Functional Expenses... 5 Notes to Financial Statements

3 INDEPENDENT AUDITORS REPORT Board of Directors Rebuilding Together OKC, Inc. Oklahoma City, Oklahoma We have audited the accompanying statements of financial position of Rebuilding Together, Inc. as of, and the related statements of activities, functional expenses and cash flows for the years then ended. These financial statements are the responsibility of Rebuilding Together OKC, Inc. s management. Our responsibility is to express an opinion on those financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Rebuilding Together, Inc. as of, and the changes in its net assets and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. Lawton, Oklahoma November 30,

4 STATEMENTS OF FINANCIAL POSITION June 30, ASSETS ASSETS Current assets Cash and cash equivalents $ 118,101 $ 182,599 Accounts receivable 46,812 64,366 Endowed funds held by Oklahoma City Community Foundation 21,531 21,531 Total current assets 186, ,496 Noncurrent assets Capital assets (net of accumulated depreciation) 9,458 13,815 Total noncurrent assets 9,458 13,815 Total assets $ 195,902 $ 282,311 LIABILITIES AND NET ASSETS LIABILITIES Current liabilities Accounts payable $ 8,325 $ 7,787 Payroll liabilities 2,407 10,709 Total current liabilities 10,732 18,496 Total liabilities 10,732 18,496 NET ASSETS Unrestricted 161, ,350 Temporarily restricted 2,000 4,934 Permanently restricted 21,531 21,531 Total net assets 185, ,815 Total liabilities and net assets $ 195,902 $ 282,311 The accompanying notes are an integral part of these financial statements

5 STATEMENTS OF ACTIVITIES Years Ended June 30, Temporarily Permanently Temporarily Permanently Unrestricted Restricted Restricted Total Unrestricted Restricted Restricted Total Revenues, gains & other support Contributions $ 620,034 $ 2,000 $ - $ 622,034 $ 622,655 $ - $ - $ 622,655 Donated goods and services 662, , , ,240 Special event 147, , , ,326 Other income 1, ,699 7, ,300 Investment income (loss) 2,465-2,465 13,051-3,817 16,868 Net assets released from restictions Expiration of time restrictions ,456 (9,456) - - Satisfied by payments 4,934 (4,934) ,900 (29,900) - - Total revenues, gains & other support 1,438,809 (2,934) - 1,435,875 1,508,928 (39,356) 3,817 1,473,389 Expenses Program services 1,357, ,357,385 1,343, ,343,190 Management and general 29, ,733 29, ,762 Fundraising 127, , , ,590 Total expenses 1,514, ,514,520 1,483, ,483,542 Increase (decrease) in net assets (75,711) (2,934) - (78,645) 25,386 (39,356) 3,817 (10,153) Net assets, beginning of year 237,350 4,934 21, , ,964 44,290 17, ,968 Net assets, end of year $ 161,639 $ 2,000 $ 21,531 $ 185,170 $ 237,350 $ 4,934 $ 21,531 $ 263,815 The accompanying notes are an integral part of these financial statements

6 STATEMENTS OF CASH FLOWS Years Ended June 30, Cash flows from operating activities Cash received from grants, contributions, and other revenues $ 788,378 $ 723,387 Interest received 2,465 13,051 Cash paid to suppliers and employees (855,341) (778,059) Net cash used by operating activities (64,498) (41,621) Cash flows from investing activities Acquisition of capital assets - (3,021) Net cash used by investing activities - (3,021) Net decrease in cash and cash equivalents (64,498) (44,642) Cash and cash equivalents, beginning of year 182, ,241 Cash and cash equivalents, end of year $ 118,101 $ 182,599 Reconciliation of decrease in net assets to net cash used by operating activites: Decrease in net assets $ (78,645) $ (10,153) Adjustments to reconcile decrease in net assets to net cash used by operating activities Depreciation 4,357 4,153 Unrealized gain on endowment fund investment - (2,817) Changes in assets and liabilities Decrease (increase) in accounts receivable 17,554 (31,893) Decrease (increase) in other assets - (1,000) (Decrease) increase in accounts payable and accrued expenses (7,764) 89 Total adjustments 14,147 (31,468) Net cash used by operating activities $ (64,498) $ (41,621) The accompanying notes are an integral part of these financial statements

7 STATEMENTS OF FUNCTIONAL EXPENSES Years Ended June 30, Program Management Program Management Costs and General Fundraising Totals Costs and General Fundraising Totals Salaries and wages $ 215,419 $ 6,343 $ 50,096 $ 271,858 $ 190,553 $ 5,910 $ 54,532 $ 250,995 Payroll taxes 19, ,705 24,454 18,198 (133) 5,330 23,395 Employee benefits 16, ,277 18,731 12, ,302 14,562 Professional dues 9, ,315 7, ,380 Travel and subsistence 12, ,125 13,841 11, ,189 12,632 Accounting - 7,354-7,354-6,562-6,562 Public relations/marketing 6,560-1,765 8,325 21,569-5,215 26,784 Firm meeting expense 8, ,782 3, ,737 7,834 Insurance 11, (580) 10,634 7,606 1, ,680 Bank service charges Stationery and office supplies 2,489 1, ,847 2,748 1,331 1,220 5,299 Duplication costs 3, ,175 2, ,568 Postage and express charges 2, ,831 4,751 2,164-1,782 3,946 Telephone 2, ,539 2, ,508 Miscellaneous 6,690-1,167 7,857 6, ,612 Rent 27,982 3,690 5,535 37,207 30,265 3,612 5,122 38,999 Utilities 5, ,006 7,082 6,150 1, ,589 Janitorial - 3,096-3,096-3,098-3,098 Repairs and maintenance 6, ,373 3, ,485 Depreciation - 4,357-4,357-4,153-4,153 Special events ,210 55, ,743 26,743 Development expense 5, ,042 6, ,267 Building costs 332, , , ,853 Donated goods and services 662, , , ,240 Total expenses $ 1,357,385 $ 29,733 $ 127,402 $ 1,514,520 $ 1,343,190 $ 29,762 $ 110,590 $ 1,483,542 The accompanying notes are an integral part of these financial statements

8 NOTES TO FINANCIAL STATEMENTS NOTE A DESCRIPTION OF THE ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 1. Nature of Operations Rebuilding Together, Inc. (formerly Rebuilding Together With Christmas in April OKC, Inc.) is the local sponsor of Rebuilding Together and is engaged principally in providing repair of homes of needy and elderly persons within the Oklahoma City area. Rebuilding Together OKC, Inc. support comes primarily from contributions from businesses and individuals in the Oklahoma City area. Significant accounting and reporting policies applied in the preparation of the accompanying financial statements are as follows: 2. Basis of Accounting Rebuilding Together OKC, Inc. uses the accrual basis of accounting, whereby revenues are recognized when earned and expenses when incurred. Expenses incurred but not paid and revenues received but not earned are represented by a liability on the statement of financial position. Other revenues are recognized when received or earned. Net assets represent the cumulative excess or loss of revenues recognized over expenses incurred. 3. Financial Statement Presentation The financial statement presentation follows the guidance of ASC , Financial Statements of Not-For-Profit Organizations, which requires Rebuilding Together OKC, Inc. to report information regarding its financial position and activities according to three classes of net assets: unrestricted, temporarily restricted, and permanently restricted. In addition Rebuilding Together OKC is required to present a statement of cash flows and functional expenses. Rebuilding Together OKC reports information regarding its financial position and changes in net assets according to three classes of net assets based on the existence or absence of donorimposed restrictions, as follows: unrestricted net assets consist of expendable amounts available to support Rebuilding Together OKC s operations and objectives; temporarily restricted net assets consist of amounts which have been temporarily restricted by donors for specific purposes or time periods; and permanently restricted net assets consist of an endowment maintained by the Oklahoma City Community Foundation with income generated from the investment available for the operations and objectives of Rebuilding Together OKC

9 Rebuilding Together OKC, Inc NOTES TO FINANCIAL STATEMENTS NOTE A DESCRIPTION OF THE ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 4. Recognition of Donor Restrictions Revenues that are restricted by a donor are reported as an increase in unrestricted net assets if the restriction expires in the reporting period in which the revenues are received. Donor restricted revenues are reported as an increase in temporarily or permanently restricted net assets depending on the nature of the restriction. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets. 5. Contributions Contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support, depending on the existence or nature of any donor restrictions. When the restrictions expire (that is, when a stipulated time restriction ends or purpose restriction is accomplished) temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statements of activities as net assets released from restrictions, unless the restrictions expire in the reporting period in which the revenue is recognized, in which case the contributions are reported as increases in unrestricted net assets. Gifts of long-lived assets with explicit restrictions regarding their use and contributions of cash that must be used to acquire long-lived assets are reported as restricted contributions. Absent donor stipulations regarding how long those assets must be maintained, Rebuilding Together OKC, Inc. reports expirations of donor restrictions when the donated or acquired assets are placed in service. Revenues that are restricted by a donor are reported as an increase in unrestricted net assets if the restriction expires in the reporting period in which the revenues are received. All other donor restricted revenues are reported as an increase in temporarily or permanently restricted net assets depending on the nature of the restriction. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets. 6. Donated Materials and Services Certain services relating to specialized skills, materials, and facilities are donated to Rebuilding Together OKC, Inc. by various individuals and organizations. Such donated services, materials, and facilities, with an estimated fair value of approximately $662,585 and $702,240 have been included in revenues and expenses for the years ended, respectively. Other contributed services relating to Rebuilding Together OKC, Inc. s home repair program, - 7 -

10 Rebuilding Together OKC, Inc NOTES TO FINANCIAL STATEMENTS NOTE A DESCRIPTION OF THE ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 6. Donated Materials and Services (continued) with an estimated fair value of $263,887 and $263,534, were received during the years ended, respectively, but were not recognized in the financial statements because they do not meet the criteria for recognition under generally accepted accounting principles. The fair value of these services is estimated by management based on knowledge about the number of skilled and unskilled laborers utilized per improved home-site. 7. Capital Assets Capital assets are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets ranging from three to five years. Donations of capital assets are recorded as contributions at their fair market value at the date of donation. Such donations are reported as increases in unrestricted net assets unless the donor has restricted the donated asset for a specific purpose. 8. Functional Expenses The costs of providing program services have been summarized on a functional basis in the statements of functional expenses. Accordingly, certain costs have been allocated among the programs and supporting services benefited. 9. Cash and Cash Equivalents Cash and cash equivalents include checking and money market funds with a maturity of three months or less. 10. Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates

11 NOTES TO FINANCIAL STATEMENTS NOTE A DESCRIPTION OF THE ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 11. Income Tax Status Rebuilding Together OKC, Inc. qualifies as an organization exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code. As such, no provision has been made for federal or state income taxes. Rebuilding Together OKC has adopted the provisions of FASB Accounting Standards Codification Topic ASC (previously Financial Interpretation No. 48, Accounting for Uncertainty in Income Taxes). The implementation of this standard had no impact on the financial statements. As of June 30, 2011 and 2010, the unrecognized tax benefit accrual was zero. NOTE B CAPITAL ASSETS Activity for capital assets during the years ended, was as follows: 2012 Beginning Ending Balance Increases Decreases Balance Capital assets Furniture and equipment $ 37,343 $ - $ - $ 37,343 Total capital assets 37, ,343 Less: accumulated depreciation (23,528) (4,357) - (27,885) Capital assets, net $ 13,815 $ (4,357) $ - $ 9, Beginning Ending Balance Increases Decreases Balance Capital assets Furniture and equipment $ 34,322 $ 3,021 $ - $ 37,343 Total capital assets 34,322 3,021-37,343 Less: accumulated depreciation (19,375) (4,153) - (23,528) Capital assets, net $ 14,947 $ (1,132) $ - $ 13,

12 NOTE B CAPITAL ASSETS (continued) Rebuilding Together OKC, Inc NOTES TO FINANCIAL STATEMENTS Depreciation expense included in the accompanying financial statements for the years ended was $4,357 and $4,153, respectively. NOTE C ENDOWED FUNDS Rebuilding Together OKC, Inc. participates in an endowment fund through the Oklahoma City Community Foundation (OKCCF). OKCCF is a not-for-profit entity that provides for endowed contributions to be pooled to maximize return on investments for the benefit of area not-forprofit organizations. Contributions into the endowment fund are permitted by the not-for-profit entities as well as individual donors in the community who designate the beneficiary of their contributions. Earnings on these endowed funds are paid annually to the beneficiary organization for unrestricted use. The endowed funds contributed by Rebuilding Together OKC, Inc. and the earnings thereon, net of distributions received, are reflected as Endowed funds held by Oklahoma City Community Foundation and were recorded at $21,531 each year at June 30, 2012 and 2011, respectively. The endowed funds contributed by third-party donors held by OKCCF designated for the benefit of Rebuilding Together OKC, Inc. were approximately $36,953 and $38,133, at, respectively, and are not reflected in Rebuilding Together OKC, Inc. s statement of financial position. NOTE D OPERATING LEASES Rebuilding Together OKC signed a new lease, classified as an operating lease, with a lease term beginning in March 2009 through February The monthly base rent is as follows according to the lease agreement: Term Monthly Base Rent Term Base Rent 03/01/12-02/28/13 $ 3,209 $ 38,506 03/01/13-02/28/14 3,209 38,

13 NOTE E NET ASSETS Rebuilding Together OKC, Inc. NOTES TO FINANCIAL STATEMENTS In accordance with FASB ASC , Accounting for Contributions Received and Contributions Made, restricted net assets are created by donor restrictions, not by resolutions of the board of directors. Rebuilding Together OKC, Inc. has funds that are restricted by donors for periods after year-end. During the years ended, temporarily restricted net assets of $4,934 and $39,356, respectively, were released due to the passage of time restrictions or other purpose related restrictions. Temporarily restricted net assets as of consist of $2,000 and $4,934, respectively, which are restricted for use after year-end due to time restrictions or payment satisfaction restrictions. As of, permanently restricted net assets are discussed in Footnote C Endowed Funds NOTE F EVALUATION OF SUBSEQUENT EVENTS The Organization has evaluated subsequent events through November 30, 2012, the date which the financial statements were available to be issued